The FINANCIAL — Americans’ spending levels continued to be relatively healthy in May. Their daily self-reports of spending averaged $104, similar to the $107 average in April. The latest figure marks the fourth consecutive month that Americans’ spending averaged $100 or higher — a first since Gallup began tracking this in 2008.
The May average is based on more than 15,000 interviews conducted as part of Gallup Daily tracking throughout the month. Gallup asks Americans each night to report how much they spent the previous day, excluding spending on normal household bills and major purchases such as a home or car. The measure gives an indication of discretionary spending.
In most years since 2009, May’s spending average has been within $2 of the average for the entire year. There are three exceptions: May 2010 and May 2014, when Americans’ spending rivaled or even matched their holiday spending highs in December, and May 2008, the highest monthly average not only for that year, but also in Gallup’s entire trend.
Last month’s average is the highest for May since 2008, when self-reported spending averaged $114. Americans’ spending fell later that year as the global financial crisis took hold. By May 2009, their spending averaged about $50 less — $63.
In recent years, spending averages have nearly returned to their pre-financial-crisis heights. Figures for March and April 2017 were the highest Gallup recorded for these individual months in nearly a decade.
April-to-May changes in spending have been mixed in Gallup’s trend. May spending has either remained flat or increased from the previous month. While some increases have been large, such as by $28 in 2008 and by $10 in 2014, others were small and not statistically significant.
It is unlikely that June will yield a higher spending average than May, given that May-to-June increases have not occurred in Gallup’s prior years of tracking. From 2009 to 2016, Americans’ spending either remained flat or dipped slightly in June; the dip was most marked in 2008.
Spending Stable Among Higher-, Lower-Income Earners
Among both higher- and lower-income earners, average spending in May was similar to April. Americans living in households earning $90,000 or more annually spent an average of $169 — which is among their highest averages in the past year.
Spending among Americans in households that earn less than $90,000 annually averaged $79. This too is among the highest rates for this group over the past year.
Bottom Line
Consumer spending remains relatively high as Americans remain more positive than negative about the state of the national economy and fewer adults are unemployed than at any time in the past 16 years. May’s average is in line with a generally higher level of spending in 2017 after nearly eight years of typically sub-$100 figures.
Typically, Americans’ spending in June is similar to or lower than it is in May, so the expectation is there would be no increase in spending in the coming month. If that is the case, spending will likely remain at a relatively healthy level compared with previous years.
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